The flurry of reports surrounding the US climate bill continued yesterday with the release of a major new report from the Peterson Institute for International Economics, which concluded that the controversial legislation would create hundreds of thousands of jobs.
The American Power Act, which was launched earlier this month by Democrat Senator John Kerry and independent Senator Joe Lieberman, has been routinely characterised as a "job killer" by Republicans opposed to the bill.
However, the non-partisan study from the Peterson Institute predicts that the boost to low-carbon industries that will result from the legislation will deliver a net increase in average annual US employment of 203,000 between 2011 and 2020.
The report, which compared a scenario in which the bill is passed in its current form against a business-as-usual scenario, accepted that around 72,000 jobs would be lost in the fossil fuel industries. But it predicted that these losses would be more than offset by 165,000 new positions in the nuclear industry, 19,000 new jobs in the renewable sectors, 28,000 biofuel-related jobs and 96,000 positions resulting from clean coal projects.
It predicted that some of these job gains would be lost between 2020 and 2030 as the clean tech sector matures, but still concluded that overall the bill would result in 6,300 more jobs in 2030, compared to a business-as-usual scenario.
It also rejected Republican accusations that the Kerry-Lieberman plan to put a price on carbon emissions through a national emission trading scheme would act as a crippling "energy tax", concluding that households will see an average increase in energy bills of just three per cent and an increase in fuel prices of five per cent between 2011 and 2030.
It added that even these modest increases are likely to be offset by improvements in household and vehicle energy efficiency that could leave the average household $35 a year better off as a result of the bill.
The report predicted the legislation will lead to a reconfiguring of the US energy complex that would see the proportion of energy generated from fossil fuels fall from 84 per cent currently to 70 per cent by 2030, with a huge increase in nuclear and renewable energy capacity making up the difference.
It added that, as a result, US oil imports would fall by between 33 and 40 per cent below current levels and nine and 19 per cent below business-as-usual levels by 2030, reducing annual US expenditure on imported oil by between $51bn and $93bn a year.
The pricing of carbon, which the report predicted would reach over $55 a ton by 2030, would also help to cut greenhouse gas emissions from sites covered by the proposed emissions trading scheme by 42 per cent compared to 2005 levels by 2030.
Senator Kerry was quick to praise the report, hailing it as a "non-partisan, hard-headed study" that should act as "an economic and security wake-up call".
The legislation will require the support of a handful of Republican senators if it is to secure the 60 votes needed to pass through the Senate. However, Republicans have expressed staunch opposition to the bill and its chances of success were dealt a major blow last month when the one Republican who had worked on its development, Senator Lindsey Graham, withdrew his support for the legislation.
Kerry and Lieberman have included a number of sweeteners in the bill, including increased support for nuclear energy and offshore drilling, and are now hoping that backing for the billfrom business leaders and economists could help sway a number of moderate Republicans.
The Peterson Institute for International Economics is significant as it is the first major economic impact assessment of the draft legislation to be undertaken. It will be followed within the next couple of months by similar studies from the Environmental Protection Agency and other government agencies, which are required before the bill can move through various Senate Committees.
It also follows a series of high-profile reports on climate change released this week by the US National Research Council, which concluded that climate change is largely man-made and poses a serious threat to the US. It also argued that pricing carbon represents the most effective means of curbing carbon emissions.
In related news, the US Department of Energy's National Renewable Energy Lab released the results of a three-year study yesterday detailing how relatively simple changes to energy grid management would allow the existing grid infrastructure in the western states to support a huge increase in renewable energy capacity.
The report found that the WestConnect power grid could cope with up to 35 per cent of its electricity coming from renewable sources without the need for any major infrastructure upgrades. Critics of renewable energy have long argued that existing grid infrastructure will struggle to handle the unpredictable nature of wind and solar energy, but the US report is the latest in a series of studies on both sides of the Atlantic to demonstrate that existing grids can typically cope with a large chunk of their power coming from renewable sources.